CCH Axcess Tax

ITC Adjustment/Salvage

This entry is used for ITC basis adjustment or salvage.

The type of entry present is determined by reviewing the related entry in the "Method" field. If the method is a Pre-ACRS method, then the amount is assumed to be salvage. If the method is an ACRS or MACRS method, the amount is assumed to be an ITC basis adjustment.

The Investment Tax Credit is computed when an entry is made in the "ITC Code" field. For ACRS or MACRS property placed in service after December 31, 1982, the "Cost/Other Basis" is reduced by the appropriate ITC basis adjustment taken on the asset. The ITC reduction is Pro Formaed for next year.

To override ITC basis reduction, enter the reduction amount in the "ITC Adjustment/Salvage" field and an ACRS or MACRS method. Do not enter a code in the "ITC Code" field. Enter the ITC on Investment Credit section.

The basis and the ITC basis adjustment are computed and the amounts are carried to Form 4797 or Schedule D when the "Automatic Sale" feature is used on the sale of the asset.